Investment-linked policies, or ILP, are policies that features both investment and protection components. It’s often marketed as a plan that is flexible and is tailored for your needs. It also has high returns, in exchange for high risks. In this article, fundMyLife examines the features of Aviva’s only ILP, MyLifeInvest, and reviews it.
What is it?
Aviva MyLifeInvest is a regular premium ILP. It provides a lifetime coverage for death and terminal illness. It also provides coverage for total and permanent disability (TPD) until age of 70.
#1 Benefits when life-stage events happen
When you reach a new life-stage, you can raise your sum assured without a medical checkup. According to Aviva, it means a change in marital status, childbirth/new addition to the family, i.e. adoption, and approval of mortgage. Bear in mind you’ll have to apply within 3 months of the mortgage approval. On top of that, your change in life-stage requires proper documentation and evidence for the adjustment of benefits.
#2 Reducing coverage
Besides life-stage events where you increase your coverage, you can also reduce your coverage as well. In fact, you can even reduce your coverage to zero to maximize investments. However, you can only do so if either you reach 55 years old, or you have paid at least twelve years’ worth of premiums. On other other hand, increasing the sum assured after reducing it is subjected to medical underwriting.
This product has several riders available:
- Level Term Cover – additional protection against death and terminal illness
- Early Critical Illness Cover – covers earlier stages of critical illness on top of regular ones
- Critical Illness Additional Cover
- Critical Illness Accelerated Cover
- Level Term Critical Illness Accelerated Cover
- Payer Critical Illness Premium Waiver Benefit
- Payer Premium Waiver Benefit
- Critical Illness Premium Waiver
In general the riders are categorized into three kinds: 1) enhanced coverage of death and TPD, 2) critical illness coverage, for both early and normal, and 3) premium waivers in the case of sickness or accidents.
Turns out the product summary is not available publicly online. However, we contacted kind advisers from Aviva for a copy of the MyLifeInvest product summary. From there, we obtained more details on the insurance coverage charge for death, TPD, and critical illness riders separately.
#1 Death benefit
We observe that the coverage amount is relatively low until early 50s which then starts rising exponentially. Interestingly, the rates are not too different for male and female non-smokers and smokers.
The charge for TPD is relatively low for the first 40 years of age, which then increases exponentially thereafter. However, the range of the amount is small, with the maximum of $7/$1000/year.
#3 Critical illness
The insurance charge for critical illness has a similar range to death, with the premiums mostly very low until the age of 50. After that, the premiums go up very quickly.
As observed from the charts above, the premiums for death, TPD, and critical illness are relatively low for the first 50 years of age. The charges then increase exponentially thereafter. As such, this plan is useful earlier in your life as a means of cheap protection, not unlike term plans.
The option to minimize your coverage, and at some point to zero, is useful if you want to focus on your investments. Who is it for? We think it’s good for people who want to invest but needs a lot assistance – preferably together with a financial adviser who knows what he or she is doing. It requires active monitoring since insurance cover charge increases over time leaving you less to purchase units in funds.
While we obtained a copy of the product summary, there were several details missing such as the specifics for some of the riders, e.g., premium waiver conditions, early critical illness charge, etc. As such, you will have to contact the representatives for more information. However, based on our intuitive understanding of the rider names, think MyLifeInvest is a relatively modular ILP compared to the others out there. This is probably because MyLifeInvest is the only ILP from Aviva, which means it has to be very flexible to cater to as many people as possible.
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That’s all folks! We hope you found the review useful and got more detailed information on what MyLifeInvest is all about.
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